Washington Report: Election 2008



By Debra Reschke

On the heels of the 2008 election season, the nation is left with an almost total regime change in Washington. With the Democratic Party taking the reins of the legislative and executive branches, those in the fuel oil industry, among others in the business world, are wondering what’s in store for the future of their respective marketplaces.

If President-elect Barack Obama keeps his campaign promises, the country could be looking at a completely different energy industry. For instance, his energy policy includes wanting to spend $150 billion over ten years to spur the private sector to bring cleaner energy to market.

‘There will be an enormous push to expand renewable fuels,” said Dan Gilligan, president of the Petroleum Marketers Association of America. With the new seats grabbed by the Democrats, ‘those ideas will get a lot more attention in the coming Congress.”

‘Since Obama is from Illinois, he has a strong allegiance to biofuel,” said John Eichberger, the vice president of government relations for the National Association of Convenience Stores.  But producing more renewable fuels could have its challenges, as corn-based ethanol is struggling with charges that it is causing food supply problems.

‘Cellulosic has a great opportunity, if they can figure it out,” Gilligan said and added that he believes biodiesel has great potential, as long as producers don’t depend too heavily on soybeans.

Lower crude oil prices may have stopped the momentum on the offshore drilling issue. ‘They (Congress) let the ban on offshore drilling expire at the end of September,” said Eichberger, which, in his opinion, means they’ll most likely reinstate it.

However, what could be more telling about the future energy policy than the campaign proposals are the recent developments in Congress, specifically the House Government Reform Committee Chairman Henry Waxman (D-Calif.) successfully challenging Michigan Democratic Congressman John Dingell for his chairmanship of the powerful Energy and Commerce committee.

Rep. John Dingell has been known for his support of Detroit’s automakers and is seen as more of a centrist. He also has a reportedly strained relationship with Speaker of the House Nancy Pelosi (D-Calif.), who created a special committee to advocate for action on climate change legislation chaired by Rep. Ed Markey (D-Mass.).

‘We’re going to see a sharp change in climate change (policy),” Eichberger said in regards to Rep. Waxman becoming the new head of the Energy and Commerce committee.

Gilligan warns that cap and trade policies to control emissions on businesses, such as refineries, could add an enormous cost for the petroleum industry, which would ultimately drive prices up. 

However, the president can’t do everything since Congress has to be a check on him. But as Eichberger suggested, in this instance it could be the other way around. ‘President-elect Obama has an opportunity and the responsibility to be a break on Congress,” he said, adding that presidents’ world perspectives change once they get into office, usually becoming more moderate. ‘It’s up to him to draw the line, so we don’t overreach.”

‘When politicians overreach,” Gilligan said, ‘legislation will fail.”

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